If Uber drivers were employees, they'd be owed at least $730 million

New court documents reveal cost of independent contractor status versus full-fledged employment.

Court documents show that ride-hailing company Uber would have owed drivers in two states as much as $730 million more had they been considered employees instead of contract workers, according to Reuters.

The figure covers the expense of things like mileage and vehicle maintenance. It was included in newly unsealed court documents that detail a proposed settlement of a class-action lawsuit that covers Uber drivers in California and Massachusetts, and it provides fresh insight into the sort of reckoning the company could face if drivers across the United States were elevated to the status of full-fledged employees.

Federal regulators are reviewing those classifications. For now, Uber and plaintiffs' attorneys have agreed to settle the lawsuit for $100 million. But some drivers are angry about the proposed settlement and a federal judge must first decide whether the terms are fair.

"Although classified as independent contractors, Uber drivers are employees. They are required to follow a litany of detailed requirements imposed on them by Uber." - Court documents

The case is similar to one Lyft, Uber's main ride-sharing competitor, attempted to settle last month, in which the company agreed to a payout of $12.25 million. But another federal judge rejected that settlement because, according to Reuters, it represented only 9 percent of the drivers' claims.

In the proposed Uber settlement, contractors who have driven for 750 miles or less – roughly half of the covered class – would receive $24. Drivers who log more than 25,000 miles would receive $1,950.

Beyond the $730 million in maintenance and mileage costs calculated according to federal standards, drivers say they could have earned an additional $122 million in tips if Uber had offered that option to its customers as is customary in taxis and other livery services.

Together, the two cases, O'Connor vs. Uber Technologies and Cotter vs. Lyft, offer a glimpse at the broader issues of what may or may not constitute an employee in the new sharing economy. Their outcomes could add clarity to the legal status of drivers.

In court filings, attorneys for the Uber drivers argue that, "although classified as independent contractors, Uber drivers are employees. They are required to follow a litany of detailed requirements imposed on them by Uber, and they are graded and are subject to termination, based on their failure to adhere to these requirements. ... In addition, Uber is in the business of providing car service to customers, and that is the service Uber drivers provide."

After the proposed settlement was announced in April, Uber said its drivers value their independent status. They retain, "the freedom to push a button rather than push a clock, to use Uber and Lyft simultaneously, to drive most of the week or for just a few hours," company founder Travis Kalanick said in a written statement. The company says more than 450,000 contractors are driving for the service in the US.

A company spokesperson did not return a request for comment on the latest developments Tuesday.

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